How Does the Purchase of Equipment by Signing a Note

question 19

Multiple Choice

How does the purchase of equipment by signing a note affect the accounting equation?

• A)assets increase; assets decrease
• B)assets increase; liabilities decrease
• C)assets increase; liabilities increase
• D)assets increase; stockholders' equity increases

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Definitions:

Fundamental Function

A basic or essential function that is fundamental to a system or process.

Government

The organization that is the governing authority of a political unit, responsible for creating and enforcing laws and managing public resources and services.

Investment Banks

Financial institutions that assist individuals, corporations, and governments in raising financial capital by underwriting or acting as the client's agent in the issuance of securities.

Bonus Structures

The design of additional compensation methods to employees, typically based on performance criteria.